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Governor's Column: Considering Our Options On Medicaid


            Office of Gov. Dennis Daugaard

500 E. Capitol Ave.

Pierre, S.D. 57501






FOR IMMEDIATE RELEASE:  Friday, December 11, 2015

CONTACT:  Tony Venhuizen or Kelsey Pritchard at 605-773-3212


EDITORS/NEWS DIRECTORS:  Please consider the following column from Gov. Dennis Daugaard. For an audio recording of the Governor’s weekly column, visit news.sd.gov/media.aspx and click on “Audio” under “Governor Dennis Daugaard.”



Considering Our Options On Medicaid


A column by Gov. Dennis Daugaard:


In the past, I’ve been unwilling to support expansion of Medicaid in South Dakota. Without a plan to cover the state costs, I have opposed expansion. But I have never said “never,” and there may be a way to cover our costs completely.


Since last spring the state has been in discussions with the federal government and South Dakota tribes about the way healthcare services are provided to Native Americans. The United States Government strives to meet their treaty obligation to provide health care to Native Americans through the Indian Health Service.


Many Native Americans in South Dakota are not able to be served by IHS, however. This can be because there is no IHS facility in their area, because IHS doesn’t have specialists available, because of long wait times or because IHS funding for the fiscal year is exhausted.


No matter the reason, when a Native American who is Medicaid eligible does not seek care through IHS, but instead goes to another provider, part of the cost is shifted to the state. When South Dakota must cover these costs, it is because the federal government is not meeting its treaty obligation.


If more Native American health care expenditures could be 100% federally funded – as the treaty requires – the state could save up to $67 million per year. That would be enough to cover fully the state’s costs to expand Medicaid. 


In the past, the federal government has not been receptive to fixing the cost shifting problem. Gov. Janklow tried to change it and couldn’t. Gov. Rounds sued over it and lost. But now, the federal government is willing to listen. For the first time, we have the opportunity to solve this longstanding problem.


But it is only possible if we expand Medicaid at the same time. Any change to our state Medicaid program is subject to approval by HHS and requires tribal consultation. They will not approve a change in how IHS reimburses our state unless we use the proceeds to fund expansion.


This is a very complex area and making something work will be difficult. I cannot tell you today that everything will come together. But if it does, we should seize the opportunity. Making this change would benefit Native Americans and others who would gain health coverage. It would also save funds for counties, jails and prisons, hospitals, and other Medicaid providers.


I know many South Dakotans are skeptical about expanding Medicaid, and I share some of those sentiments. It bothers me that some people who can work will become more dependent on government. It bothers me that a single adult could choose to go on Medicaid rather than work a minimum wage job to qualify for insurance on the health insurance exchange.


But we also have to remember those who would benefit, such as the single mother of three who simply cannot work enough hours to exceed the poverty line for her family.


I also want to be clear: This is not a done deal. Our talks with the federal government have been promising, but there is much work to be done. There is still the potential for this effort to fall through.


I will not support expansion unless our savings cover costs anticipated next year, and every year through State Fiscal Year 2021. I will not support expansion unless HHS and IHS do what they need to do to make it work. I will not support expansion unless our tribes agree with these changes. And I will not support expansion unless the Legislature supports it also.


This is a complicated decision and we all have to weigh the positives and negatives. In my mind, the opportunity to end this longstanding IHS reimbursement issue, to gain coverage for more South Dakotans, to improve health care for Native Americans, to save money for counties and Medicaid providers, and to potentially save millions in state dollars outweighs the negatives.  If we can make the money work, we should seize this opportunity.